Perhaps The Most Significant Ruling In U.S. Patent Law in 2007 - NO Change in Practice

On Wednesday October 31, 2007, Judge James C. Cacheris, sitting in the U.S.
District Court for the Eastern District of Virginia, delivered perhaps the
most significant ruling in U.S. patent law this year (including the Supreme
Court’s decision in KSR Inc. v. Teleflex Int’l. Inc.). In the consolidated
cases of Tafas v. Dudas and Smithkline Beecham Corp. v. Dudas, Judge
Cacheris granted Plaintiffs’ (”GSK”) motion for a preliminary injunction,
enjoining the U.S. Patent and Trademark Office from implementing its new
continuation and claims rules entitled “Changes to Practice for Continued
Examination Filings, Patent Applications Containing Patentably Indistinct
Claims, and Examination of Claims in Patent Applications,” 72 Fed. Reg.
46716 (Aug. 21, 2007). The new continuation and claims rules were set to
take effect on November 1st.

The Court also enjoined the Patent Office from issuing new regulations
restricting the number of continuing applications, the number of requests
for continued examination, or the number of claims that may be filed with
the Office; denied the Patent Office’s motion to strike the declaration of
former Commissioner of Patents Harry F. Manbeck, Jr.; and granted the
motions of the American Intellectual Property Lawyers Association (AIPLA),
HEXAS, LLC, The Roskamp Institute, Tikvah Therapeutics, Inc., and Elan
Pharmaceutical Corp. for leave to file amici curiae briefs in support of
GSK’s motion for a temporary restraining order and preliminary injunction.

In a thorough and well-reasoned opinion (especially in view of the
compressed time frame that saw parties filing briefs as late as Tuesday),
the Court found in GSK’s favor on all four prongs of the legal test for
granting a preliminary injunction. First, the Court found that GSK had
demonstrated a likelihood of success on the merits on its allegations that
the rules exceed the Patent Office’s statutory authority; the rules are
contrary to the Patent Act; the PTO’s application of the rules to pending
applications implicates the prohibition on retroactive application of agency
regulations; and the standards for submitted an examination support document
are impermissively vague. Second, the Court found that GSK would be
irreparably harmed by implementation of the new rules, stemming from the
uncertainty that the rules would create, and the negative impact on
investment that would follow from such uncertainty. The Court found this
harm to be greater than any harm visited on the Patent Office by delaying
implementation of the rules, satisfying the third, “balance of the
hardships” prong. Finally, the Court found the public interest rested in
preventing the rules from being implemented while the Court decided the
merits of GSK’s complaint, specifically noting the amici from across the
spectrum of technology companies that joined in opposing the rules.

The Court’s consideration of the merits will not proceed as quickly as
anticipated. Before GSK filed its complaint and its case was consolidated
with the Tafas action, the Patent Office and Dr. Tafas had agreed on an
accelerated briefing schedule for summary judgment motions in exchange for
Dr. Tafas withdrawing his request for preliminary injunction. In view of
the court’s decision, this agreement has been terminated, and the
Court asked the parties to submit a briefing schedule in the near future.
Accordingly, the Court’s determination on the merits of whether and to what
extent the new continuation and claims rules will be implemented has been
delayed indefinitely. For most patent prosecutors, however, the important
thing is that the new continuation and claims rules will not go into effect
on November 1st.

The information contained in this alert is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.